Zurich Insurance Group AG is in advanced talks to sell a portfolio of German life insurance policies to Cinven’s Viridium Group, the latest transaction in a busy corner of financial dealmaking, people familiar with the matter said.
The portfolio includes roughly 20 billion euros ($21 billion) of liabilities, according to the people, who asked not to be identified because the information is private. Zurich could make an announcement as soon as this week on the planned sale, which may fetch around 500 million euros, the people said.
An agreement hasn’t been reached and the talks could still end without one, the people said. A sale also would be subject to regulatory approval.
The market for back books — or portfolios of old insurance policies — is one of the most active in financial services as it provides an easy way for insurers to release capital. They’re often bought by private equity-backed consolidators, which can take out costs and shift some of the funds into higher-yielding assets.
French insurer AXA SA is also exploring a sale of German life insurance assets, people with knowledge of the matter said. The portfolio has attracted interest from suitors including Apollo Global Management Inc.’s Athora arm, according to the people.
Viridium has been doing deals in this space for years, buying Protektor Lebensversicherungs-AG’s life insurance business in 2017 and Assicurazioni Generali SpA’s German business Generali Lebensversicherung AG in 2019.
Zurich’s German unit said last year it was looking for a solution for part of its portfolio of high-interest policies so that it can focus on unit-linked products. The assets being sold by Zurich include policies with guaranteed payouts for customers. The insurer, led by Chief Executive Officer Mario Greco, is scheduled to announce quarterly earnings on May 12.
A representative for Zurich declined to comment beyond previous statements. Spokespeople for Athora, Axa and Viridium also declined to comment.
–With assistance from Myriam Balezou and Alan Katz.
Photograph: A flag flies outside the Zurich Insurance Group AG’s headquarters in Zurich, Switzerland, on Thursday, Feb. 11, 2016. Photo credit: Michele Limina/Bloomberg.
